IN THIS EDITION: Canada takes China to the WTO, Canadian rare earth elements see an opportunity in the China-U.S. trade war, and Meng Wanzhou is back in court.
“The Huawei case will be resolved, eventually. That does not mean China and Canada will resume normal relations. Canada’s business and political elite have spent the past 25 years trying to forge deeper ties with the Middle Kingdom. That strategy now requires a clear-eyed assessment” – Nicolas Van Praet and David Parkinson, the Globe and Mail
• The Huawei CFO is back in court today in Vancouver, where arguments about disclosure of documents is expected to be heard ahead of her extradition trial.
• Canada is taking China to the World Trade Organization over China’s ban of Canadian canola seeds. Canada argues that China has refused to show any evidence of the pests it claims are in the canola.
• It is likely that this case will not be resolved before the Canadian election.
• The Canadian Canola Council says the ban has cost the canola industry $500 million so far.
Canadian rare earth elements see an opportunity
• The Canadian rare earth elements (REEs) are gaining attention as China threatens to curb its exports. China currently produces close to 90 per cent of the world’s supply of REEs, but is now threatening to restrict exports, as a part of its response to American tariffs.
• REEs are used in a variety of industrial applications, including clean energy, aerospace, electronics, and vehicles. The largest use for REEs are the creation of permanent magnets, which are essential components of modern electronics (cell phones, TVs, computers, jet aircraft, etc.)
• Canada doesn’t currently produce rare earth elements but has one-third of the world’s REEs. There are projects underway to start mining REEs in the Northwest Territories, Nova Scotia, and Ontario, with more exploratory projects expected to start soon.
Agriculture industries that have been hit by China bans – particularly pork, beef, canola, and soy – are still feeling the heat, months after the bans were put in place. Here are some updates:
• Pork: producers, processors, and packers are looking for government support totaling $360 million. A Statistics Canada analysis suggests that the pork ban could represent a hit of over $373 million to trade between the two countries.
• Canola: the Canadian canola harvest is expected to drop 8 per cent this year, which can at least be partially attributed to lower seeding from the Chinese ban on Canadian canola seeds.
As the last China Brief went out, we had just gotten word that Dominic Barton would be Canada’s new ambassador to China. Since then, there’s been some commentary on the appointment:
• In the Financial Post, Terence Corcoran argued that Barton could be a good appointee, particularly with his contacts in China, but worries that Barton admires China too much.
• In the Manitoba Cooperator Alex Binkley argues that the appointment is a great boon for Canada’s agriculture industry, as Barton has been a strong advocate for a stronger agriculture sector in Canada.
• Barton’s recent marriage to the head of Asia Pacific operations for BlackRock (the world’s largest asset management firm) has raised concerns that Barton will encounter conflicts between his professional role and personal life.
Interestingly, we have seen very little commentary on China’s new ambassador to Canada, Cong Peiwu.
Commentary on Chinese strategy
As you’ve seen in the last few China Briefs, there has been regular commentary in the media on Canada’s strategy on China. This has continued:
• In the Western Producer, Ed White writes that Canada is playing “good cop, bad cop” with China – not as an intentional strategy, but with the Liberal Party taking the good cop route and the Conservative Party taking the bad cop route.
• In the National Post, Derek Burney writes that Canada can fight back against China by exercising “quiet but persistent diplomacy aimed at gaining some relief for the incarcerated Canadians.” Additionally, Canada should support Taiwan more, and follow New Brunswick’s example and ban Confucius Institutes.
• In the National Post, Conrad Black writes that Huawei was likely responsible for the collapse of Nortel in the 2000s, and the lesson of this is that “the West generally should be unambiguously supportive of the ongoing U.S. effort to persuade China to conform to civilized international business practices.” But he also argues we should not extradite Meng, because we should not have an extradition treaty with the U.S.
• Canada is backing Taiwan’s efforts to be invited to the International Civil Aviation Organization meeting in Montreal at the end of this month. This is at odds with China, which has prevented Taiwan from joining the meetings. The ICAO is a UN Agency that helps co-ordinate safe and secure air traffic. The meetings begin tomorrow – there is still no word if Taiwan will be participating.
• For the second time in three months, a Canadian warship travelled through the Taiwan Strait. China regards this as a domestic waterway because it claims Taiwan as part of its territory, whereas Taiwan sees the strait as international waters. The warship was shadowed by the Chinese military as it made the transit.
• This weekend the Globe and Mail released an extensive deep dive on the Canada-China relationship, and how we’ve gotten to the point we’re at today. (And yours truly was quoted in it, so you know you want to check it out.)
• In response to the trade pressure Canada is facing from China, the Government of Ontario and the Government of Saskatchewan have announced that they are (separately) leading trade missions to Japan and South Korea in October.
• The Canadian Institute of Steel Construction has slammed the federal government’s decision to waive tariffs on foreign steel imports for the LNG Canada and Woodfibre LNG Projects. The steel for these projects is coming from China.
• One businessman commented that he didn’t think there were steel yards in Canada big enough for these projects, and that they would’ve had to go to China.
• Despite the tensions between Canada and China some Canadian companies are seeing great success in business opportunities in China – like the Canadian Wellness Institute, based in Winnipeg, that has recently opened two locations in China and is planning 100 more.
– Sarah Pittman, policy analyst
The China Brief is a compilation of stories and links related to China and its relationship with Canada’s West. The opinions expressed in the links are those of the articles’ authors and don’t necessarily reflect the views of the Canada West Foundation and our affiliates.